More Details On YouTube's Pursuit Of Celebrity Channels & Professional Content

You know those rumors that went around a while back about YouTube courting celebrities and professional content creators to come create videos exclusively for the site? The Wall Street Journal was the first to report on it, and speculated that YouTube was willing to spend as much as $100 on procuring original content from as many as 20 new channels.

Several major media sites have inside sources at YouTube, but in this case, the source in question doesn't work at YouTube at all. All Things Digital actually talked to one of the 20 super-secret "professional content developers”—AKA, celebrities… famous people or large production houses already known for producing movies and television shows.

It seems there are a lot more details being share behind the scenes on how this "professional content" system is intended to work. Specifically, here's what All Things Digital found out about the proposal YouTube is making to celebrities:

YouTube will give the company $5 million to create a branded "channel" for the site, which it will feature prominently.

YouTube will keep selling ads against the channel, and will keep all revenue up until it recoups its $5 million outlay. After that, YouTube and the channel partner will split ad revenue, roughly 50/50.

Content on the channel will initially be exclusive to YouTube. But after the first year of a three-year deal, the channel partner can distribute their stuff wherever else they want.

The channel creator will retain full ownership of all of their stuff.

The author is careful to point out that these are the details being offered by YouTube only to this one maker of "professional content," and can't necessarily be extrapolated to the rest of the people YouTube is pitching. And while I understand him sharing that caveat in the name of full disclosure… it's pretty obvious that all the deals will look something like this.

Will Celebrities Bite?

And it sounds to me like a good deal… for all parties involved. It's easy to assume that $5 Million isn't that large a number, particularly in Hollywood. But let's not forget how many actors there are that don't make $10 Million per picture. Only the top tier stars make that much… and most of the rest of the riches in Hollywood flow to the producers and studio executives.

Think about how often we joke about a good actor starring in a crappy movie, speculating that they did it just for the paycheck? $5 Million is, without a doubt, a big enough sum to get some celebrities thinking about this deal.

Are There Strings Attached?

But when you really analyze the deal being offered by YouTube, you can see the "strings attached" that All Things Digital's article title hints at. The big string, obviously, is that the $5 Million is essentially a loan. It's not a paycheck. Every penny of that money would be recouped by YouTube before the star makes any ad revenue themselves.

And since they can't really distribute their content to other places for the first three years, that ad revenue is really the only way to make money off this "professional content." So the $5 Million becomes more of a production budget for filmmaking, and not a salary.

That may still be enough for some. I'm sure most actors and actresses in Hollywood have ideas or scripts they'd love to make on their own, if only they could get a studio to bankroll it. And now here's YouTube, offering a pretty darn big bankroll, with no restrictions on content variety or length. This deal could help some professional content creators get creative passion projects made by doing an end-around the more traditional studio and distribution system.

Wrap-Up

There's a reason this is coming out through a secret insider source, and that's that YouTube isn't ready for this to be public. Which means… a lot of this could change before anything becomes official.

What will likely not change is that YouTube is actively trying to recruit high-end content from notable celebrities, all in an attempt to improve their total content offering and keep viewers watching videos for longer. And it is going to happen eventually, even if they have to radically alter their concept between now and then. Netflix is busy at work on creating their own original series, just as HBO transitioned back in the day from a movie channel to a channel that has both movies and original series.

Content can come from anywhere. In this age of rapidly expanding video technology and increasing video production, we're seeing quality online entertainment content from amateurs and brands alike… why can't it also come from companies that used to be primarily about distribution? It can, and it will. I just hope YouTube doesn't alienate too many of their homegrown stars in their pursuit of big-name talent. It would be easy to imagine them getting bitter and looking at other options for growing their own careers. And with last week's announcement of The Collective (Freddie Wong, iJustine, & others) partnering with Blip.TV… it may already be happening.

Jeremy Scott is the founder of The Viral Orchard, an Internet marketing firm offering content writing and development services, viral marketing consulting, and SEO services. Jeremy writes constantly, loves online video, and enjoys helping small businesses succeed in any way he can.

Matt Kovalakides

Interesting, but who writes the content? Who shoots and edits it for them? After all, these are Hollywood actors, not multi-skilled YouTubers. :) Of course, with 5 mil I guess you can hire just about anyone.

Informative and intriguing post, in regards to how far YouTube is willing to take their battle with the Tinsel Town studios to keep its stars in house. Again, great post! Just tweeted from our Twitter.

@placevine

http://www.VideoLeadsOnline.com/ Ronnie Bincer

I see it as a good idea ($5Million production loan) and don't think it will cause YouTubers to run-away. Those that go elsewhere are looking for things that YouTube doesn't offer, not because they are offended at what YouTube is doing (in my opinion).

Plus it is aimed/offered to such a small segment of people that I think the avg. YouTuber will simply notice some cool new options/channels when it gets going, not an "oh no, the sky is falling" reaction.